It’s a harsh truth that a Axmouth and Branscombe residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the first few years due to the loss of value being disguised by increases in the Axmouth and Branscombe property prices.Where your lease has approximately 90 years left, you should start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips under eighty years - otherwise a higher amount will be payable. The majority of leasehold owners in Axmouth and Branscombe will be able to extend under the legislation; however a conveyancer will be able to clarify whether you qualify for an extension. In some situations you may not be entitled. There are also strict deadlines and procedures to follow once the process has commenced and you will need to be guided by your conveyancer throughout the process.
Leasehold residencies in Axmouth and Branscombe with more than 100 years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little upside in buying the freehold unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 85 years from the date of completion of the mortgage. Please ensure that you explain the implications of a short term lease to the borrower. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Godiva Mortgages | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
Retaining our service gives you better control over the value of your Axmouth and Branscombe leasehold, as your property will be more valuable and saleable in terms of lease length should you decide to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Half a year ago Alfie, came critically close to the 80-year threshold with the lease on his two bedroom apartment in Axmouth and Branscombe. Having bought his flat twenty years previously, the lease term was of no bearing. Thankfully, it dawned on him that he would soon be paying an escalated premium for Extending the lease. Alfie was able to extend his lease just in the nick of time last August. Alfie and the landlord in the end settled on the final figure of £5,000 . If he had missed the deadline, the figure would have gone up by at least £1,100.
In 2012 we were phoned by Mr and Mrs. H Evans who, having owned a one bedroom flat in Axmouth and Branscombe in September 1997. The question was if we could shed any light on how much (roughly) premium would be to extend the lease by ninety years. Similar residencies in Axmouth and Branscombe with an extended lease were valued around £280,000. The average ground rent payable was £45 invoiced quarterly. The lease finished on 27 September 2096. Having 70 years as a residual term we estimated the compensation to the freeholder to extend the lease to be between £12,400 and £14,200 not including costs.
Mr and Mrs. F Rodríguez owned a garden apartment in Axmouth and Branscombe in October 2009. We are asked if we could approximate the premium would likely be for a 90 year extension to my lease. Comparative premises in Axmouth and Branscombe with 100 year plus lease were worth £223,400. The mid-range amount of ground rent was £60 invoiced monthly. The lease elapsed on 19 August 2085. Having 59 years as a residual term we estimated the compensation to the freeholder for the lease extension to be within £27,600 and £31,800 plus legals.